Buying your first home is one of life’s biggest achievements, but it also comes with costs that aren’t always obvious at the start. Many first-home buyers focus on saving for their deposit, which makes sense, yet the deposit is only one part of what you’ll need.
Once you’ve reached your savings goal, you’ll encounter a range of hidden costs for first-home buyers that form part of buying, settling, and owning your home. These can include stamp duty, legal fees, inspections, lender fees, and ongoing expenses like strata, insurance, and maintenance.
Understanding these costs upfront can help you set a realistic budget and avoid unexpected financial strain. At Unconditional Finance, we help first-home buyers in Sydney, Melbourne, and across Australia prepare for the full picture so you can make informed decisions and aim to stay financially comfortable after settlement.
If you’re still comparing options, you can explore your next steps in our first home buyer home loan guide.
Understanding the Full Cost of Buying a Home
A home loan pre-approval shows what you may borrow under a lender’s serviceability assessment, but it doesn’t always capture what you’ll spend. Beyond the purchase price and deposit, buying a home involves several one-off and ongoing costs that are essential to plan for.
A balanced first-home budget typically includes:
- Upfront costs of buying a house, like lender and government fees, conveyancing, and inspections
- Ongoing homeownership costs such as strata levies, council rates, insurance, and maintenance.
- Contingency buffers for interest rate increases or unexpected repairs
Taking time to factor these in now can protect your cash flow later and prevent unnecessary financial strain.
One-Off Costs You’ll Need Before Settlement
Before you get the keys to your new property, there are several one-off costs you may need to cover to complete the purchase and finalise ownership.
1 Stamp duty and transfer fees
Stamp duty is one of the most significant upfront costs you may face. It’s a state government tax applied when a property changes hands, and the amount depends on where you buy, the property’s value, and whether you qualify for any first-home buyer exemptions or concessions.
In New South Wales and Victoria, thresholds for exemptions and reductions can shift with government policy, so it’s important to check the official stamp duty calculator for your state or speak with your mortgage broker before making an offer.
In addition to stamp duty, you may also need to pay land transfer fees and a mortgage registration fee, which are set by your state’s land registry office. These fees are smaller but still necessary to finalise ownership.
2 Conveyancing and legal fees
Conveyancing covers the legal and administrative steps involved in transferring property ownership. A licensed conveyancer or solicitor will:
- Review the contract of sale
- Perform title and property searches
- Liaise with your lender
- Coordinate settlement on your behalf
Depending on the property type and location, fees may range from a few hundred to several thousand dollars. Fixed-fee conveyancing is common, but always confirm what’s included, such as disbursements, search fees, and government charges, before proceeding.
3 Building, pest, and strata inspections
Before you sign, it’s crucial to understand the property’s true condition. Independent inspections may help you avoid costly issues in the long run.
- A building and pest inspection identifies structural issues, water damage, or pest activity.
- A strata inspection report gives a detailed overview of shared property finances, maintenance history, and potential future levies if you’re buying a unit or townhouse.
These inspections improve transparency and may identify issues that could affect your budget later.
4 Lender and bank-related fees
When you apply for a loan, lenders may charge various fees to assess and process your application. Common examples include:
- Application or establishment fees
- Valuation fees to confirm the property’s market value
- Settlement or discharge fees
If your deposit is below 20% of the property value, some lenders may require Lenders Mortgage Insurance (LMI). This one-off premium protects the lender and may make it possible to buy with a smaller deposit, depending on the lender and your circumstances.
Each lender’s fee structure can differ, so reviewing your Key Facts Sheet can help you understand what’s included before you proceed.
5 Other government and admin charges
Some smaller charges are easy to overlook, such as mortgage registration fees, electronic settlement platform fees (e.g. PEXA), bank transfer or cheque fees (if applicable), and settlement practitioner charges. If you’re purchasing an investment property rather than a home to live in, land tax may also apply.
While individually minor, these costs can add up quickly, so it’s best to factor them into your total upfront budget.
Ongoing Costs of Owning a Property
After settlement, homeownership comes with a range of regular expenses that vary depending on the property, location, and type of ownership.
1 Council rates and strata levies
Your local council typically charges rates to cover essential services such as waste collection, roads, and community infrastructure. These are often billed quarterly or annually and are based on the property’s assessed value in your local area.
If you purchase an apartment or townhouse, you’ll also pay strata levies (or body corporate fees). These cover building insurance, cleaning, landscaping, and contributions to a sinking fund for future major works. Properties with amenities like lifts, pools, or gyms typically attract higher levies.
2 Insurance
Many lenders require evidence of building insurance before settlement, but requirements vary by lender and property type. For freestanding houses, you’ll arrange your own cover. For apartments or townhouses, the building is typically insured through the strata, but you’ll still need contents insurance for internal fixtures and personal belongings.
If you’re renting out the property, landlord insurance may offer extra protection for rent loss, tenant damage, or liability claims. It’s worth reviewing coverage, limits, and exclusions carefully to ensure the policy suits your needs and property type.
3 Utilities and service connections
Electricity, gas, water, and internet services must be connected before moving in, and most providers charge a connection or setup fee. Ongoing utility bills will then form part of your monthly budget.
Comparing suppliers using government resources such as Energy Made Easy can help you find more competitive plans and manage costs effectively.
4 Maintenance and repairs
Homeownership comes with the responsibility of ongoing maintenance. Regular maintenance prevents minor problems from becoming costly repairs.
You may need to budget for:
- Roof and gutter cleaning
- Plumbing or electrical work
- Painting and minor renovations
- Replacing appliances or flooring
Setting a home maintenance budget of around 1–2% of your property’s value annually is a practical starting point (actual costs vary). Older homes or properties in regional areas may require a higher allowance.
5 Furnishings and upgrades
Even if your home is move-in ready, many buyers want to personalise their space. Furniture, appliances, blinds, or outdoor improvements like fencing and landscaping can all add to the cost.
Factoring these expenses early ensures they don’t stretch your finances once loan repayments begin.
Preparing for Post-Settlement Costs and the First 12 Months
Even after settlement, many first-home buyers encounter expenses they may not have anticipated. The first year of homeownership often brings new or irregular costs that can catch you off guard if you’ve already stretched your budget to buy.
Common post-settlement expenses include:
- Moving costs, such as hiring removalists, deep cleaning, or temporary storage
- Utility bonds or deposits when opening new accounts
- Council and water rate adjustments, where you may need to reimburse the seller for prepaid amounts at settlement
- Minor home improvements, such as locks, paint, blinds, or security systems
In some cases, lenders may also charge an annual package fee shortly after settlement. Some lenders charge a few hundred dollars per year, depending on the product.
Budgeting for this first 12-month period helps prevent cash flow strain and ensures your emergency buffer remains intact for true unexpected events, not early ownership costs.
Assessing Your True Borrowing and Repayment Capacity
Getting pre-approved is a great step, but your actual comfort zone might differ from what the bank says you can afford. Lenders assess borrowing power using your income, debts, and living expenses, but only you can determine what feels sustainable.
Understanding how much mortgage you can afford helps you focus on affordability rather than just eligibility. Reviewing your monthly spending, savings habits, and future plans will help you decide what repayment level fits comfortably into your lifestyle.
Stress-testing for rate rises
Interest rates move over time, and planning ahead can make a big difference to your long-term comfort. Before committing, calculate your repayments at one to two percentage points above the current rate.
If you’re on a fixed-rate loan, it’s worth understanding what happens when the fixed rate period ends and how to prepare for the change to a variable rate. Taking these steps gives you clarity about how future rate shifts could affect your budget.
Making repayments work for you
Most lenders let you choose between monthly and fortnightly repayments. Opting for fortnightly repayments may effectively add the equivalent of roughly one extra monthly repayment across a year (depending on how your lender calculates repayments), which may help reduce interest and shorten the loan term.
Features such as offset accounts or redraw facilities can also provide added flexibility. They allow you to save on interest while keeping access to your funds in case of emergencies or large upcoming expenses.
Building Financial Buffers and Emergency Funds
Unexpected costs are part of homeownership, whether that’s a leaking roof, a rate rise, or a sudden appliance breakdown. Building a financial buffer gives you breathing room and stability.
You might consider:
- Keeping three to six months of loan repayments in an offset or savings account
- Setting up a maintenance fund for future repairs
- Holding personal insurance cover, such as income protection, depending on your circumstances
Having these buffers in place ensures you can handle the unexpected without disrupting your budget or lifestyle.
How We Help You Plan Beyond the Deposit
As mortgage brokers in Sydney, we go beyond comparing rates. We help you map out your entire homeownership journey, from understanding upfront costs to planning for future expenses.
We can:
- Outline all purchase and ownership costs relevant to your property type
- Compare lender fees, LMI policies, and eligibility criteria
- Estimate your borrowing power and repayment comfort
- Recommend loan structures with offset or redraw features for flexibility
- Coordinate with your conveyancer and lender for a smooth settlement
Every lender has different policies, and our role is to help you make clear, informed decisions that suit your long-term goals.
Putting It All Together
Budgeting beyond the deposit isn’t about making homeownership more complicated; it’s about ensuring you’re ready for everything that comes with it.
By factoring in all upfront and ongoing costs, planning for the first 12 months after settlement, testing your budget for rate changes, and maintaining financial buffers, you’ll feel more confident about your purchase and better equipped to manage your loan in the long run.
If you’d like to understand what costs may apply to your situation or how to structure your loan safely, our Sydney mortgage brokers can help you compare policies and plan your next steps.
Disclaimer: The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention are taken in its preparation, any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates are subject to change. Approved applicants only.
FAQs: Budgeting Beyond the Deposit
Yes, some schemes may help. The First Home Guarantee administered by Housing Australia can reduce the need for LMI if eligibility is met, and state concessions may reduce stamp duty depending on price caps and residence rules. Availability and criteria change over time, so always check current government guidance.
Most legal, inspection, and government fees are paid by settlement. Some lenders may allow LMI to be added to the loan amount, but state charges like stamp duty and transfer fees are usually paid upfront. Policies differ by lender and state.
A rate lock is an optional feature some lenders offer to hold a fixed rate from approval to settlement for a fee, subject to each lender’s terms. It can help if rates rise during your application, but fees, lock periods, and terms vary. Consider it alongside your timeline and risk tolerance.
You may need to increase your deposit, renegotiate the price, accept higher LMI, or request a reassessment with the same or a different lender. Outcomes depend on lender policy and supporting evidence such as comparable sales.
Many lenders accept gifted funds with a statutory declaration, and some still require a portion of genuine savings. Where family guarantees are involved, eligibility and documentation differ by lender, and independent legal advice is usually recommended.
Yes. Lenders typically assess the credit limit on cards (not just the balance) and treat BNPL commitments as ongoing expenses, which can reduce borrowing capacity. Closing unused facilities before applying may help, subject to your circumstances.
Title insurance is optional and may cover certain risks like unknown encroachments or some registration errors, subject to the policy. Premiums are usually a one-off cost at or before settlement. It’s not required by all lenders, so compare coverage and exclusions carefully.